Bankruptcy & Taxes - What to do now

Question

My wife & I were divorced on 12-27-07. Not knowing better we filed our taxes as married for 07. Now I am being advised to admend the tax retrun and file as single. I own a small LLC business and by doing so will have a loss carry over of $30,000 - my ex will end up with a $6,000 liability, which I will pay in exchange for the loss. However, now my wife intends to file for bancruptcy. If so, will her IRS debt be eliminated, therefore saving me $6,000?

Answer 1

IRS debt can not be discharged in bankruptcy unless it is 3+ years old.

So....No.

Answer 2

Was the divorce final on 12-27-07 (meaning you could have married someone else on 12-28-07?)  If not, you were still married.  If you were single, there is nothing to negotiate, you should refile and explain how you filed as married in error.  Are you in a community property state?  Unless the LLC generated community property income or loss it is all yours and you wouldn't need to pay the ex anything for the loss.

Bankruptcy will not help her.  Taxes must be at least three years old to be discharged in bankruptcy.